Lean Meets Green at Subaru

I'm Jason Turgeon, the newest addition to the Lean Blog team. Mark and I have had an email dialog going for a few months about the intersection of green and lean, and he's invited me to post on the topic. So over the next couple of months, I'll try to put about one post a week up discussing the link between these two topics, which are intrinsically linked at many levels.

But first, a brief introduction. My interest in lean comes from a lifelong fascination with innovation and improving systems. Before I discovered lean thinking, I made a nuisance of myself at many jobs, where I continually disrupted my bosses with constant suggestions for improvement and a somewhat over-the-top willingness to ask “why?” Now that I have the tools of lean to channel my energy into, I think I'm a good deal more effective in my daily efforts to make everything around me just a little bit more effective, but I am by no means an expert in lean systems. Lean is something I'm new to and I'm enjoying learning about it and looking forward to the chance to apply it.

I have a BS in Environmental Geology from Northeastern University in Boston, where I live. I work for the US Environmental Protection Agency, where I specialize in improving energy efficiency at drinking water and sewage treatment plants. EPA has done a fair amount of work to link green and lean, although it hasn't really caught on inside the agency yet. The agency is looking at lean both from a manufacturing perspective and with an eye to making government itself more efficient. I also run Textbook Revolution, a website I started in college to combat the ludicrously high prices of textbooks. The textbook game is another old world industry that could really benefit from some lean thinking, but that's a whole ‘nother topic. I'm also a big fan of live music, and I write on the growing movement to green the music industry at GreenBase, the green blog of JamBase.com.

Subaru and Zero Landfill Status:

So now that you know who I am, let's dive in. This week's focus is on an article in the Feb 18th USA Today that Mark alerted me to. The article describes the efforts of a Subaru plant in Lafayette, Indiana, to eliminate waste from the factory, a quest known as “zero landfill status,” and discusses several other companies doing the same thing. Of course, the elimination of waste is one-half of what lean is all about, so this fits in perfectly. The article quotes Wal-Mart CEO Lee Scott:

Wal-Mart CEO Scott set a zero-waste goal for the cost-conscious retailer in 2005. “Think about it,” he said at the time. “If we have to throw it away, we had to buy it first. So we pay twice. Once to get it, once to have it taken away.”

To figure out how to eliminate waste, management took a page from the “go and see” playbook–they took all of the trash out of a dumpster and spread it out on the factory floor to get a sense of what they were throwing away. Then they went to work figuring out what could readily be recycled and what could be reused. They took steps to rightsize, like using a smaller roll of steel for parts that are stamped, reducing the leftover steel by over 100 pounds per car. Management also spent a lot of time designing systems to make recycling easier, like sorting all the plastic shrink-wrap together.

Subaru also went for the other aspect of lean–respect for people. The article says that the waste elimination program has reached “an almost religious fervor” among employees. Unfortunately, there is no discussion of just how the plant got this buy-in. In the same vein, the plant has worked extensively with its suppliers to coerce them into taking back reusable or recyclable materials. The styrofoam inserts that protect engine parts get used 5 times before they get recycled. And because many of their suppliers are close, often within an hour's drive, they are sending recyclables back in trucks that would have otherwise been empty, reducing waste in transportation as well.

“Old” and “New” Environmentalism

But what does all of this mean from an environmental perspective? To start answering that question, it helps to know that there are really two separate environmental camps out there, with dozens of splintered subfactions. The “old environmentalism,” as I like to put it, was based on nagging and regulations. Old environmentalists are always pointing out what other people are doing wrong, begging government to pass more laws to restrict other people's behavior, and generally making life unpleasant for those around them. This is the group I work for. Old environmentalists are prone to saying things like, “if we could just convince every American to change one lightbulb to a compact fluorescent, we could save x, y, and z.” To be brutally honest, it's not much fun to hang out with this group of people.

“New environmentalists,” a group which I try very hard to be in, are much more closely aligned with lean thinkers. New environmentalists, inspired by books like Natural Capitalism: Creating the Next Industrial Revolution and Cradle to Cradle: Remaking the Way We Make Things, are constantly on the lookout for a better way to change the planet. Those of us in this camp would prefer to align economics and the environment, working withbusiness instead of trying to regulate it out of existence. Our arguments for government intervention tend to be at the more macroeconomic level, for instance suggesting that we redesign tax laws to punish wasteful behavior and reward good behavior. New environmentalists believe in the concept of “sustainability” not as a poorly-understood buzzword but as a way of life, a game-changing philosophy in which everything we do, everything we buy, everything we use contributes in a positive way to the world, both now and in the future.

Subaru: Reducing Waste but still Wasteful?

Getting back to the question of Subaru's waste-reduction, I think that old environmentalists are probably very happy about Subaru's work. Why look–they've eliminated almost 100% of their waste! They have a very high recycling rate! They've done what we asked, and saved money in the process!

But from a new environmentalist perspective, Subaru's work is only the first baby step towards true sustainability. It's a good step, to be sure, and the company deserves praise and recognition for it, but if they stop there, it's not good enough. From our perspective, the stuff in the dumpster is just the tip of the waste iceberg. Cars are perhaps the single most visible element of a wasteful, unsustainable lifestyle, and as such are emblemic of the larger societal shifts we need to see if we're going to avoid some pretty painful global collapses in the not-too-distant future.

Let's look at the waste that's left in the system three ways. At the more granular level, cars are still woefully inefficient. Even a Toyota Camry Hybrid (this plant makes Camrys for Toyota, but the article doesn't say if the Hybrid is one of them) only gets about 30 mpg in real world driving. As the authors of Natural Capitalism put it:

The contemporary automobile, after a century of engineering, is embarrassingly inefficient: Of the energy in the fuel it consumes, at least 80 percent is lost, mainly in the engine's heat and exhaust, so that at most only 20 percent is actually used to turn the wheels. Of the resulting force, 95 percent moves the car, while only 5 percent moves the driver, in proportion to their respective weights. Five percent of 20 per-cent is one percent- not a gratifying result from American cars that burn their own weight in gasoline every year.

Natural Capitalism devotes an entire chapter to a discussion of how to make the automobile more efficient at delivering the service we want–comfortable, safe, reliable transportation–while at the same time using less natural resources. They argue that using steel doesn't make any sense in a modern automobile. Steel, to them is a “monument.” By switching to modern plastics and carbon fiber, we could have cars that are just as safe, just as fast, and much, much more efficient, without having to do anything involving hybrids or biodiesel or hydrogen. Consider:

The conventional car is heavy, made mostly of steel. It has many protrusions, edges, and seams that make air flow past it turbulently. Its great weight bears down on tires that waste energy by flexing and heating up. It is powered by an internal combustion engine mechanically coupled to the wheels. Completely redesigning cars by reconfiguring three key design elements could save at least 70 to 80 percent of the fuel it currently uses, while making it safer, sportier, and more comfortable. These three changes are:

1. making the vehicle ultralight, with a weight two to three times less than that of steel cars;

2. making it ultra-low-drag, so it can slip through the air and roll along the road several times more easily; and

3. after steps 1 and 2 have cut by one-half to two-thirds the power needed to move the vehicle, making its propulsion system “hybrid-electric.”

As you can see, there is a lot of waste left in the car. But what about what happens to the car when its useful life is over? Today, most automobiles end up in a metals recycling facility, where they are crushed and shredded. The economically useful metals are sorted for recycling, and everything else–the seatbelts, the plastic dashboard, the steering wheel, all the leftovers, collectively known as “fluff”–is trucked to a landfill. Making cars more efficient is a fantastic first step, but efficiency isn't the only end goal. In Cradle-to-Cradle, the argument is that being less bad is not the same as being good. They say that reducing the amount of waste is not good enough. In a properly designed system, one that mimics nature, there is no such thing as “waste.”

The “C-to-C” take on auto manufacturing would have the Subaru plant churning out cars that were designed not to be shredded at the end of their lives, but to be dissassembled and turned back into new cars. BMW long ago started designing for disassembly, making it easier to take cars apart and reuse their components. The next logical step would be to figure out how to turn these parts, say the body panels from one car, back into top-quality body panels on a new car with a minimum of energy. The auto manufacturer that does this will have a huge competitive advantage. Why stamp out new steel doors for each car, at tremendous environmental and financial cost, if you could have a plastic door that was reconditioned using an environmentally benign painting process and put back into service on a new car at a fraction of the cost of a new steel door?

The third take on the Subaru factory, and the most extreme, is that the factory shouldn't be producing cars at all. Automobiles, as I've said, are emblemic of waste and over-consumption. If the rest of the world suddenly starts looking like America, we're going to be in a lot of trouble, fast. This has already begun in China and India, where they began by modeling their vision of success on our ways. As car ownership has spiked, transportation and infrastructure headaches, air pollution, water pollution, the destruction of land for roads and parking lots, and all the other negatives that come from automobiles have also risen.

The mayor of Bogota made worldwide news when he made strides to take back the city streets from cars and give them to people (see the video at the end of this post for an inspirational look at how things could be better). Now there are hundreds of miles of real bike lanes and pedestrian avenues–not a stripe on the side of the road, but full lanes off-limits to cars, separated from auto traffic by vegetated buffers. And every Sunday and holiday, the city shuts off dozens more miles of road to cars, opening them up to cyclists and pedestrians.

The more extreme environmentalists would say that no matter how little waste goes to the landfill, the factory is inherently wasteful. They would prefer to see it transformed into a factory that produces clean, modern, efficient, and comfortable public transportation. It could be light rail or it could be a bus that becomes part of a really useful bus system, one that people enjoy riding, like the one that transformed Curitiba, Brazil. Or it could be something new, something that none of us have thought of yet. But even if you don't agree with that point of view, there is still plenty of room to eliminate waste, both in the design of the car and the cars disposition when its useful life is over.

So kudos to Subaru for taking the first steps on the path to sustainability. Let's see if the company can follow through.

I found the EPA’s Lean and Environment workbook to be very innovative. My first thought was “wow…the government wrote this?”!

Even after facilitating 10 or 20 VSM projects, I never thought of considering solid waste along with the other 8 wastes. I see now that there is an Energy version along the same lines. Brilliant! It would be so simple to incorporate these additional data into a value stream map, and even more savings could be generated.

Plus, as you mentioned was Subaru’s experience, this is another way to invoke passion in people. I think if you include a green focus in the lean process, you will engage more minds and hands in the process.

I encourage everyone on the blog to look at these 2 workbooks, and use them. We all like to make our world a little greener, and this is an easy and powerful way to integrate this focus into work you are already doing.

Interesting thoughts about cars. You raise some great points….we have a long long way to go. Maybe $4 gas will help…we’ll see, it seems to be coming!

Great video too. I’d be interested in an analysis of Mayor Bloomberg’s recent green NYC plan and how it compares with the Colombian experience.

No material is more recyclable than good old-fashioned steel. It’s the most cheaply and commonly recycled material in the world and much of that has been driven by the automotive world, going way be to the folk’s who upgraded their early Model Ts. Ford, in fact, set up recycling facilities to burn the rubber and cloth out of old cars so that the steel could be easily reclaimed.Something tells me that wouldn’t pass muster today, but it’s an early example of a company taking cradle-to-cradle responsibility.

Great post! I really like seeing Lean & Green discussed together. If they are mentioned in the same breath enough, maybe Lean will become a household term like Green. I get a lot of blank stares when I tell people that I’m involved with lean manufacturing, so a little public awareness can’t hurt. I hope “Lean & Green” becomes the next big catchphrase in the business world. With the way these ideas complement each other (and conveniently rhyme), this seems likely to happen.

Besides, Lean and Green are really one in the same. As you mentioned, a big part of Lean is reducing waste (another way of putting it is “conserving resources”); ditto for Green. Lean is also about doing what’s right for company, the economy, and society as a whole; ditto for Green. To me, it’s just long-term thinking and respect for people applied to whatever we’re doing.

As much as I enjoy and respect Hawken, I’m amused that you rely upon a book over ten years in age for your description of the “new” type of environmentalism.

The issue I take with natural capital as a set of theory is its belief in the extension of the service sector.

Perhaps I’m remembering this incorrectly and it was just a hermeneutical move to extend the paradigm, but I remember it more as an actual belief in the expansion and worth of the service sector and eventually an utterly reliance on a scavenger set economy.

It is amusing that at some point success became defined as the ability to own your very own internal combustion engine.

Hi all-thanks for the comments. Sorry for the delay, some earlier technical difficulties kept me from posting my first set of replies.

Thanks for the positive comments, anon.

David, I’m not sure what the economic tradeoffs are. Carbon fiber is probably more expensive to produce. Aluminum is very recyclable, which is good because there is a tremendous amount of embodied energy in aluminum. But perhaps I should have elaborated more on the cradle-to-cradle aspect. The idea is to design using materials that are both lightweight and easily reUSED, not reCYCLED. Recycling what you do when you have failed to either reduce or reuse the original material. It should be the option of last resort. And there are certainly many technical hurdles to overcome in designing a more efficient car, but the hurdles remain because not enough attention has been paid to them. They’re not insurmountable, they just need some significant work, work that the auto industry has been unwilling to do.

One problem with making cars lighter, much like the problem of making buildings greener, is that the steps to be taken in design COST the manufacturer but BENEFIT the consumer, so it can be difficult to reconcile the extra expense needed to make cars lighter with the profit to the manufacturer. But with higher prices on gas, people will pay a premium for better mileage, as we’ve seen recently. The big 3 US carmakers are up the creek with gas-guzzling SUVs and scrambling to catch up, once again, to Toyota because they were too short-sighted to work on efficiency a decade ago when gas was cheap.

But improving efficiency doesn’t necessarily have to be expensive. There are many, many things engineers could do to improve the mileage of cars immediately that would be very cost effective. The Union of Concerned Scientists redesigned the Ford Explorer years ago to get about 50% better fuel economy without significantly increasing the cost to manufacture it.

But anon is right, $4 gas will help. I paid $3.39 the other day for regular (unfortunately, there’s no decent public transit between Boston and Burlington, VT, and no way to get around the suburbs of Burlington once you’re there without a car). Many economists think that the true cost of a gallon of gas should be higher than it is now to account for the negative externalities–environmental damage, road infrastructure, time lost in traffic, deaths from driving, etc.–that come from driving. Even ultraconservatives like Harvard’s Gregory Mankiw are calling for a $1 a gallon tax increase to curb gas use.

Andy, steel may be easily recyclable, but that’s beside the point. Steel is far heavier than modern materials, so the fuel economy of the car suffers dramatically. And when you build a heavier car, you need a bigger engine, more robust tires, etc. And recycling should always be the option of last resort. Recycling is a failure to reduce or reuse. Add in the fact that demand from India and China has pushed the prices for all metals through the roof, and it’s another strike against steel.

Mike, thanks for your comments. Glad you liked the post.

J. Thatcher, just because the book was written 10 years ago, that doesn’t make the ideas old. I’m still dealing with lots of people who haven’t changed their thinking since the 1960’s. I’m not sure when Deming started writing, but I know it was a lot longer than 10 years ago, and his ideas are still considered revolutionary by people who are new to them. It’s only in the last couple of years that Toyota has taken lean out of the fringe and into the mainstream (i.e., where people like me who don’t work in manufacturing will hear about it).

It’s been a couple of years since I read the book, so I’m not sure what you’re referencing about the scavenger set economy, but what I really took away from the book was the notion that we could redesign government to financially reward good environmental choices and punish bad ones. As a free market libertarian type, these ideas appeal to me. I was also very impressed by the concept of tunneling towards efficiency. And sure, not everything that Lovins and Hawken wrote was perfect, but it’s given us a place to start and reshaped the environmental movement.

And yes, the ability to own a car has defined success for many of us for decades. I think that Lovins et al. were simply working in that paradigm when they made their comments. They did also call for a much stronger public transit system, since they realized that not every person on the planet could own a car. Hopefully we’ll soon move past the point where owning a car = success, and get to a point where owning a car is seen as a burden or a tool necessary for certain limited professions.

Following up on my post, the Wall Street Journal is reporting today that car sales are way off in Japan, and analysts at Nissan are predicting that similar trends will soon hit Europe and the US.

So lean afficionados, what do you think? Should a company that knows its products are facing a significant decline in demand keep making that product line, perhaps improving profitability by implementing lean? Or is the company better served by seeking an alternative that will allow the facility to produce a product with a potentially rising demand (also using lean to improve profits)?

Let me first say I am a layperson of the first (perhaps second) degree when it comes to Lean. I read this article at the request of Mike L who commented above. I am very interested though with the whole Lean (and Green) philosophy. As Jason laid it out I would say I am somewhere between the old and new environmentalism. I personally don’t think that the majority of people or corporations will change their unsustainable habits without being forced to via law or the realistic promise of personal benefit by doing so. This is where the old environmentalist part comes in, I think many people and companies need to be compelled to change. The new part of me does like the idea of Lean, that people and companies can benefit themselves and the greater whole by reducing waste and being more efficient. I just hope this idea can become commonplace before places like India and China (not to mention the other 4 billion people on the planet) start living the “American Dream” of overconsumption. This is where I fear the Lean philosophy lacks the teeth that regulation can provide.

Good thoughts. I guess I could have been clearer in my discussion of the role of government in “new” vs. “old” environmentalism.

An old environmentalist is what is known as a “command-and-control” environmentalist. There’s a place for this, but it is limited. Instead of encouraging people to pollute less, it encourages them to pollute as much as they are allowed to–and no less, since reducing pollution under the allotted amount costs money but provides no financial benefit.

A new environmentalist would generally prefer to have the government step in by reforming subsidies and taxes. For example, instead of subsidizing coal and nuclear power, which we did for years to provide cheap energy for a booming economy, we would tax those forms of energy and turn our subsidies instead to energy efficiency and renewable energy research. Since tax avoidance is a rational behavior (economically speaking), businesses in energy intensive fields would presumably turn to less expensive sources of energy and energy efficiency.

These are oversimplified examples, but the end goal is to align the interests of business, government, and the environment so that we’re all working together. And I think that’s probably a pretty lean thing to do, too.